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Thursday, 28 June 2001
Page: 25537

Senator CARR (2:00 AM) —My intention is to seek to incorporate some remarks on the Higher Education Funding Amendment Bill 2001, but there are some other issues I need to articulate. Given that we are now at 2 o'clock and we have another education bill to follow, I am sure all senators would welcome us proceeding at speed. Unfortunately, though, I need to get some advice from some officials.

This particular proposition is to amend the Higher Education Funding Act to: provide base funding for universities for 2003; provide funding for 2002-03 for extra places as part of the budget measures, and that is to include some 670 extra places for regional universities; provide funding for 2002-03 for extra support for people with disabilities; vary maximum funding levels to reflect higher HECS receipts; reflect supplementation in regard to Commonwealth superannuation liabilities; transfer funds from the Australian Research Council Act to enable the Institute of Advanced Studies at the Australian National University to access ARC competitive grant programs; clarify the treatment of HECS debts in the event of bankruptcy of the debtor; and broaden the ministerial guidelines making power in relation to HECS and work experience in industry. Further, the bill will amend the Australian Research Council Act to provide base funding for 2003, to supplement for price increases and to transfer funds from HEFA, as already indicated. The opposition's view is that we should support this legislation, depending upon clarification of a number of issues.

I move this second reading amendment:

At the end of the motion, add “but the Senate condemns the Government for:

(a) reducing government expenditure on universities by $3 billion and shifting the burden onto students and graduates;

(b) cutting 3,500 research training places, including 800 at regional universities; and

(c) continuing to work towards total university fee deregulation”.

I trust the Senate will support that second reading amendment.

Is the minister able to advise me whether or not the government is prepared to take some questions on notice and provide answers within a reasonable period, such as that set down for the return of answers to questions from estimates? If so, it may in fact facilitate the passage of this legislation. Is that possible? At the end of the second reading debate, I will seek the answers to those questions.

In particular, I would like to have answers to the following questions. Does this bill seek to establish clearly that accumulated HECS cannot be extinguished by bankruptcy? Have there been instances where this has happened already? Is it the case that, under the changes proposed in the bill, the Commonwealth would have the power to claim a proportion of bankrupt HECS debtor's assets, even if in the year of bankruptcy the debtor's income was below the normal HECS repayment threshold? What are the equity measures in this for the debtors, given that others of the same income would not need to repay HECS? What are the equity arrangements for other creditors who might receive less because of the HECS repayments being made to the Commonwealth? To what extent do the provisions of the Bankruptcy Act not apply to HECS as currently administered? If it is possible, I would like to have those questions answered. I expect there will be a need to have detailed responses to those questions.

The opposition is concerned about the inconsistencies in this legislation. It is normal that after three years a bankrupt is discharged, and other debtors are automatically freed from most kinds of debts. The bill establishes that the provision for the automatic discharge of debts will not apply to HECS debts and that HECS debts have a particular character. Unlike other debts, they do not automatically have to be repaid but are repaid only under certain circumstances—that is, when the debtor's income reaches a certain level—and they are extinguished by death. For other debts, repayments are made out of the deceased debtor's estate but for HECS there is no repayment made from the estate of the deceased debtor. Why are HECS debts not treated equally with other debts by making them provable—that is, payable—in the event of bankruptcy?

It would be simpler, more effective and consistent to exclude all HECS debts from the operation of the Bankruptcy Act. That does not appear to be the case under this arrangement, and, if I have understood that correctly, why not? It would seem that there is not an extinguishment of debt. Rather, such a debt would not be considered or repaid by the trustee appointed under the provisions of the Bankruptcy Act, but would still be repaid when the debtor's income reached the required level. Can the Commonwealth initiate bankruptcy proceedings against the result of unpaid HECS debts? As you can see, a number of issues still require further explanation. Is it possible to have detailed answers to those questions in the same time frame as Senate estimates questions on notice are answered? I seek leave to incorporate the remainder of my remarks.

Leave granted.

The speech read as follows

Apart from providing base funding for universities and ARC for 2003, the major measures in this Bill implement Budget measures to provide funding for extra places at regional universities and campuses, and extra support for people with disabilities.

The regional universities initiative—$35.2 million over four years doesn't go anywhere near making up for the $171 million taken from regional universities in the 1996 Budget cuts.

As well, the Government's reduction of 3,500 research training places, as part of its White Paper changes, included 800 places lost from regional institutions.

This shows that the Howard Government has not suddenly realised the importance of education, training and research to Australia's future, but is simply in pre-election spending mode, in a desperate attempt to stay in office.

If they succeed, then the infamous Cabinet Submission will be given new life. Total deregulation of university fees, real-interest loans, and a voucher system of funding will be back at the top of the agenda.

Under this scenario, newer and regional institutions would be most likely to suffer, as well as students. who would face higher fees and, with real interest rates, pay big penalties for not having the money to pay off loans quickly.

This is Dr Kemp's privatisation/user pays agenda, which benefits the wealthy, and sees no advantage in providing opportunities to less well off Australians.

This government has cut $3 billion from university funding. If public funding had been maintained at 1996 levels, there could have been an extra 21,000 places in 1997, and an extra 54,000 places this year.

Compared with these cuts, the extra places in this Bill look hopelessly inadequate.

Despite the Government's attempts to deny the findings of the Monash University Report on Australia's performance as a Knowledge Nation, it cannot deny that Australia ranks 21 out of 29 in the OECD in terms of public expenditure on education.

Australia's public expenditure on education as a percentage of GDP—at 4.34—is still below the OECD average of five per cent, and well below that of the five leading OECD countries. which all spend more than six per cent.

Australia's average investment per tertiary student of $US29,194 compares with an OECD average of $35,087.

DETYA's own figures show the number of students per teaching staff member in our universities has risen from 15.3 to 18.84 since the Howard Government took office.