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Wednesday, 13 September 2017
Page: 10298


Ms SHARKIE (Mayo) (17:30): When considering the Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017, we should reflect on a statement made by Prime Minister Turnbull when he assumed office as Prime Minister in September 2015. The Prime Minister said:

The Australia of the future has to be a nation that is agile, that is innovative, that is creative. We can't be defensive, we can't future-proof ourselves.

This is a national goal that I share with the Prime Minister. As technology evolves faster than it ever has before, we rely on an educated society to drive the innovation that will keep Australia placed as one of the best countries in the world to work and live in.

Universities are the cornerstone of innovation. Over the last century, Australian universities have been the catalyst for some truly remarkable inventions, creations and research that have dramatically shaped the world we live in. This includes the bionic ear, invented at the University of Melbourne, which has benefited close to 200,000 people worldwide and has led to the employment of over 2,200 people; solar conversion technology developed by the University of New South Wales; CPAP technology to treat sleep apnoea, developed by the University of Sydney, which built the company ResMed, which has over 4,000 employees and annual revenues of $1.6 billion; a cervical cancer vaccine invented by the University of Queensland which saves over 250,000 lives each year; and so many more. Indeed, I don't think we give enough recognition to the university sector for research and innovation that is changing lives and creating jobs and investment in Australia.

I realise that funding has increased considerably since the uncapping of places. The sector has experienced unprecedented growth, and this has created unintended consequences and affected other sectors such as apprenticeships. While there has been unprecedented growth in student numbers, over the last five years universities have experienced significant budget cuts. Let's examine some of those cuts. In 2010, the then Labor government cut $298 million by abolishing the Capital Development Pool. In 2013, the MYEFO cut $113 million in ARC funding. In 2015, changes to start-up scholarships, cuts to the Sustainable Research Excellence initiative, closure of the OLT and closure of the Structural Adjustment Fund saw further cuts of over $2 billion. In total, over $3.4 billion of funding has been removed from the university sector in recent years. It is worth remembering that, while many of the funding cuts have occurred since the Abbott government, the Labor budget in March 2013 made cuts of $2.37 billion in higher education through the introduction of a so-called efficiency dividend.

The Nick Xenophon Team is not convinced that this bill as it currently stands will assist the sector to reform. We agree that reform is needed but cannot accept that this is the reform that is indeed needed. With the greatest of respect, this bill is tinkering around the edges with some small good measures and a blunt and deep cut that will mean job losses to the sector and higher education costs for students.

What we need is a comprehensive review of higher education that involves federal and state governments, universities and the vocational education apprenticeships sector around the table. We need a comprehensive review, akin to the Gonski-led review of education. We must look at how we prepare the next generation for the world of work to ensure young people successfully transition to sustainable employment. Right now we have university educated young people stacking shelves at supermarkets because there are few graduate jobs. These young people are in debt for thousands of dollars and their degrees are essentially redundant if they are not able to find employment in their chosen field of study in the years immediately following graduation. Unfortunately, I see too many of those young people in my electorate. At the same time, apprenticeships and traineeship numbers have significantly declined. According to the National Centre for Vocational Education and Research, in 2012 there were 470,000 apprentices and trainees. By March this year that number had declined to just 275,000 apprentices and trainees, a loss of nearly 200,000 places, yet we're not adequately addressing this crisis.

As recently highlighted by my colleague Senator Nick Xenophon, the government is yet to act on Senate inquiry recommendations that addressed skills shortages that were raised two years ago. The report Directions in Australia’s automotive industry: an industry report 2017 detailed 27,000 jobs waiting to be filled. The automotive industry is just one industry where there are skills shortages; residential construction trades is another area. This will be exacerbated as older tradesmen, highly skilled craftsmen—carpenters, stone masons and electricians—retire. If you think it's difficult to get a plumber now, wait five years!

One of the reasons for the skills shortage is that, in our culture, trades are considered an inferior career and universities the only pathway to success. In the article 'What now for the demand driven system?' Mark Burford, the former education advisor during the Rudd-Gillard government, held concerns that were raised in the 2008 Bradley review of higher education. It stated:

… moving to a demand-based approach to funding higher education cannot be done in isolation from VET. Changing higher education funding but leaving VET funding untouched would compound existing distortions.

A decade on, we can see that these concerns were well founded. We have a more educated population but job outcomes for graduates are getting worse. High-school students receive little pathway planning to determine their strengths. Trades are not seen as a valuable career. I believe they should be. By the same token, the university sector has encouraged an increase in enrolments that has led to a drop in entry standards and teaching quality. In 2016, figures released by the Department of Education and Training show that over 1,000 students were admitted to the Bachelor of Teaching with an ATAR score of less than 50. How are these students expected to teach the Australian curriculum to others when they are unable to pass it themselves? I want to make it clear that I'm not advocating for the removal of the demand driven system and a return to capped places, but we urgently need to examine the impacts of the demand driven system and examine admissions standards for students looking to enter university.

There are a number of measures that have merit in this bill. I'll detail some of those measures. I support enshrining the Higher Education Participation and Partnerships Program in legislation. This program helps to ensure that Australians from low-SES backgrounds have the opportunity to attend university. I support the $24 million allocated to work-integrated learning opportunities. A graduate leaving university with experience in their chosen field and with contacts in the industry is invaluable for their future job prospects. I support the $15 million investment in regional higher education through the establishment of eight community hubs across Australia, although I do feel that $15 million is woefully inadequate for regional Australia. I support the transparency measures and the principle of performance-contingent funding. However, I believe that what is proposed has the potential to lead to perverse outcomes. In reality, the proposed contingent funding will mean that universities will need to reduce their expenditure by 7.5 per cent each year and hold on to those funds on the likelihood that such funds may be clawed back by government in the following year should they not meet expected performance targets. This measure does not have savings in the budget, but it will pit university against university for the share of the losers' funds. It will, if you like, be a Hunger Gamesstyle policy, where smaller universities and, in particular, regional universities will be at a disadvantage when entering the game. This approach will create winners and losers rather than lifting the performance benchmarks overall.

I'm also concerned about exactly what those measures will be. If it is determined that performance-funding measures will be based on such things as retention rates or collective GPAs, will universities cherrypick students that they know will need the least support?

Does this mean a single parent or a student with a disability or a first-in-family student will be less likely to receive a place?

I accept that the new measures need to be paid for but I can't justify new measures worth $158 million coming at a cost of $3.8 billion. I cannot support increasing the student contribution. Australia currently has the fifth-highest tuition fees in the OECD countries, behind the United States, Japan, Korea and Canada. The government is asking Australian students to shoulder even more of the burden. Nearly 80 per cent of students enrolled in a bachelor degree are young people. We are asking them to pay more to get less. It is not lost on young people that many of the decision-makers in this place had the great benefit of a free university education and are now legislating for them to pay more.

Young people have borne the brunt of budget cuts for years. In the 2014 budget, we had a proposal for 'six months on, six months off' youth allowance for young jobseekers—as if young people could magically live on fresh air for six months at a time. In the same budget, National Youth Week was stripped of funding, and the Australian Youth Affairs Coalition, also known as AYAC, was defunded, ensuring young people are denied a national advocate.

Last year the government sought a five-week waiting period for young people applying for Centrelink assistance. From the 1970s through to 2013, successive governments in this place have recognised that young people deserve representation through a minister for youth. One Australian in five is aged 12 to 25, yet both major parties rejected a motion asking the Prime Minister to appoint a minister for young people, also known as a minister for youth. How can we expect young people to ever reach prosperity, or start a family if they desire, if at every turn we want to charge them more and take more from them.

The lowering of the HELP repayment threshold is an issue that has caused angst amongst young people. The HELP system is one of the most generous higher education loan systems in the world, and the current threshold for repayment is $54,869. That is significantly more than comparable countries. New Zealand has a threshold of $18,000 and the UK has a threshold of $36,000. The HELP system means no Australian student faces the barriers of up-front costs for their university education. This, I believe, above all else is the biggest contributor to encouraging students from disadvantaged backgrounds to enter university. It is, in my opinion, one of the best facets of our higher education system and we must do all we can to protect it.

The HELP loan is designed to be repaid gradually once a student has derived a benefit from it and is contributing to society. Under the proposed legislation, the repayment threshold would be lowered to $42,000 at a rate of one per cent. The question must be asked: has a person who is earning $42,000 per year derived a benefit from their university studies? The average income for a working Australian is $61,000, and that is $19,000 more than the proposed threshold. I don't believe students who are earning just $6,000 above the minimum wage are yet deriving a significant benefit from their studies. I do concede the repayment is low at that level, but I do think we need to look at this very carefully. I'm not yet convinced the $42,000 threshold is the right approach. I will be open to discussing that further with the government, as will my Senate colleagues.

The proposed changes for residents, and particularly for New Zealand students, will mean many students will no longer be able to afford to study in Australia. Remember, New Zealand is facing an election at the moment. Should the New Zealand Labour Party win—and it will be on a platform of free university study—we will find that very few students from New Zealand will be interested in migrating to Australia.

In South Australia, we have three excellent universities: the University of South Australia, the University of Adelaide and Flinders University, of which I have very fond memories. Collectively they employ 10,000 people and contribute significantly to South Australia's economy. The measures put forward in this legislation could result in up to 770 job losses across those three universities. South Australia cannot afford to lose those jobs. We cannot afford to implement legislation that will not reform the sector but will be a blunt instrument that results in job losses and higher student debt.

The Nick Xenophon Team believes we need a comprehensive review of the whole post-secondary education space in both metropolitan and regional areas. We need to consider our future workforce and how best to shape the university and vocational and education sectors together to build our nation's capacity. We need sensible university reform that does not punish students. In order to do this we must do our homework first, bringing together government and all the relevant stakeholders to design reform and then to legislate and implement same.